February 19, 2019 - Episode 21

What are Target Markets and Target Audiences?

Everyone in business has probably heard the terms target market and target audience. Jake and Mirela will discuss what both of these really are and how they interrelate. Learn why target markets are critical, and why defining one is normally the first step in launching a successful business or product. Explore why target audiences are also important, and why going niche is the way to go. We’ll also discuss key takeaways on how understanding target markets and target audiences can be used to improve any business.


Episode Transcript

Jake Braun:
Welcome to Kickin’ it with Kapok, a podcast about business stories and marketing advice. I’m Jake.
Mirela Setkic:
And I’m Mirela.
Jake Braun:
This is episode 21, “What are Target Markets and Target Audiences?” Today, Mirela and I will be talking about everything you need to know about target markets and target audiences: what they are, how the two relate to each other, and how they are different. We’ll also talk how both are important to your business. And what you can do as a business owner with this knowledge.
Mirela Setkic:
Yes, and the way that I look at it is just this big bubble or big circle of people who are people who would want or they need my product or service.
Jake Braun:
So then you got target audiences, which are a little bit different. They are a group of people that are within the target market, but they're just the people that you're aiming a particular marketing campaign at.
Mirela Setkic:
Yes, you can think of them as the little circles or little bubbles within your target market circle or bubble and so they're slightly different and they're slightly more, I guess, narrowed down and organized according to the things that they have in common.
Jake Braun:
Yeah, I think the example that I like to use is the men's neck tie. The target market for a company selling men's neck ties is probably professional men, or people who shop for professional men, people who buy them gifts. But then if it's Father's Day, the target audience for a particular marketing campaign for Father's Day is gonna be targeted at children, or significant others helping children find a gift for their father. So that's the target audience, and that particular target audience excludes a lot of the people that are actually in the target market which are the professional men who normally are buying the neck ties, or the people shopping for them. But then in this particular example that I brought up, they're not included in the target audience for the Father's Day ad.
Mirela Setkic:
Yes, and you can have multiple target audiences and they can be super small, or medium, or whatever the case is, and really just to keep it super simple, just think of your target market as your big pie of people that you are trying to sell your product or service to, or even educate them about your cause or your nonprofit and then your target audiences are the little slices of pie and they're slightly different and slightly kind of organized, and you want to have more specific campaigns for each one of those target audiences.
Jake Braun:
Okay, that sounds good. So maybe we go into the target markets are critical, or why they're critical for your business. So why do you even define what a target market is? It's usually because you're trying to come up with a strategy. You want to think about what a need-
Mirela Setkic:
Underserved or un-served.
Jake Braun:
Yeah, underserved or un-served groups that are out there that your product or service might be able to serve.
Mirela Setkic:
Exactly and really the way that, the proper way to do things instead of saying like, oh, I have this great idea, or I have this great product I want to launch, so I'm just gonna go find the manufacturers and I'm going to let's say make whole bunch of these red shoes that I want people to buy and then you make whole bunch of those shoes, and then if you haven't done your homework and you haven't identified your target market and you don't really know what the needs and wants are of your target market, you might find out that no one really wants your red shoes so the proper way to do it is to say okay, I really want to do this and then before I go to manufacturing and promoting my products, I need to learn as much as I can about my target audience and my target market and see if this product would be appropriate for them. And if the answer is yes, then you go to the next step of actually developing the product and then taking it through the entire
marketing process.
Jake Braun:
Yeah, I think that's one of the biggest misconceptions about new entrepreneurs who are hoping to start a business or actually starting a business. They think about it from the perspective of what product or service do I want to sell
Mirela Setkic:
Exactly.
Jake Braun:
And then trying to find the people who want that. But like you just said, it's actually the reverse. You want to find the market that exists that you can develop something for.
Mirela Setkic:
Exactly, I mean it's super exciting to say like oh, I really love shoes. I'm going to start, I'm going to become a shoe designer and I'm going to make shoes that have pockets. I don't even know if this is like realistic, but if no one wants shoes with pockets, then you can spend millions of dollars producing the shoe and then it's just waste of time and money. I guess if you're super wealthy and just want a hobby then you can take that approach but if you are someone who doesn't have a lot of money and really wants to put out a product or service that's going to be profitable, you have to start with your target market.
Jake Braun:
Yeah, exactly, otherwise you're just gonna, you just might get lucky and things might work out but from a strategic perspective, this is the way that you make sure that it's gonna work, or you at least drastically increase your chances of your business working out.
Mirela Setkic:
Exactly.
Jake Braun:
So what exactly goes into the definition of a target market? So you've got the basics. You've got age, income, gender, education level, profession, marital status. I might've missed a couple of them, but just the regular answers you might get asked at the end of like a survey that you're taking.
Mirela Setkic:
Yeah, all your demographic information.
Jake Braun:
And then you've got geographic information so you've got, this might be where the person lives, where they work, where they commute, where they vacation, and then the actual area. Is it just the city? Is it a metro area? Is it a state? Is it a group of states? Countries, or the whole world? What geographic region are you going after?
Mirela Setkic:
Yes.
Jake Braun:
And then behavior. How your potential customers behave. Do they shop offline? Do they shop online? If they shop offline, do they do their research before they shop?
Mirela Setkic:
How do they consume your product? Do they want to consume the product in public? Do they want to do it in the privacy of their own home? Do they go out and hang out with their friends? Are they flashy people, or are they more private? How do they behave throughout their daily routine?
Jake Braun:
And then I think the last one is other information like psychographic information. So this is opinions. Personality traits, things like that.
Mirela Setkic:
Yes, and if you find out that your target market is not really concerned about flashiness, and prestige, and luxury, then you probably should not try to sell them products that have all of those things because that's just not something that they want. They want something that's more muted and more understated and something that's just not like the liberace of products.
Jake Braun:
So is there anything else we should go through with target markets before we move into the target audience details?
Mirela Setkic:
I don't think so. I think the most, well, just to kind of summarize, there's just, it's very important to start with your target market first before you develop your product or start offering a service because it will save you a lot of time and money and you don't want to leave it up to luck unless, I guess, you're a gambling person and you just wanna take a shot and see what happens.
Jake Braun:
Yeah, I think I forgot to mention this earlier but developing your target market is one of the first things you should do when creating a strategic marketing plan, if not the first thing.
Mirela Setkic:
Exactly.
Jake Braun:
So it's definitely important.
Mirela Setkic:
Yes, I agree. And I guess we should now talk about why it's important to define your target audience, or select your target audience, and I think to keep it simple, we can just say that it's important because it helps you narrow your campaigns and fine-tune your campaign message so you're having more of a personalized or sort of like one-on-one conversation with the people who are receiving your campaign's message and a promise. If you just say well, no, I'm just going to talk to everyone in my target market, you can essentially end up speaking to no one, and when I say speaking, I mean you're not really touching people inside and making a personal connection with them because your message is way too generic and people just think well, I mean, this is, like nothing in here speaks to me. But if you narrow your target audience down to a small group of people and you tailor a very personalized message for them, they will think like oh my God, this
company, this brand, really understands me. They're like, they're speaking my language and so it's very important for the success of your campaign. The more fine-tuned and narrowed your message is, the more it's going to resonate with your audience and the better success rate is for that campaign.
Jake Braun:
Yeah, and when you do the reverse, then you're less focused, you get lower response, and then you can also run into the problem where you get into a slippery slope of your campaigns not working because you didn't make a narrow enough target audience so that gets you upset, and then you're like oh, maybe this marketing stuff doesn't work and it just turns into a vicious cycle where the more you haven't thought about it, the more it builds upon itself and it just becomes less and less effective marketing campaign or strategy the more you go down that path where you haven't narrowed it down.
Mirela Setkic:
Yeah, and you become frustrated, and you start thinking oh my gosh, I have tried everything. I have tried to deliver the most authentic message, I've spent so much money on this, and a huge percentage of the people are just not responding and then every now and then you will get people who really shouldn't have been in your target audience who give you negative feedback, and then obviously most of us don't like to get negative feedback. Then you get discouraged and then you start listening to voices who really are not the true target audience for that campaign and that can kind of take your campaign in a totally different direction, and skew results, make you feel terrible, and then you give up. But the positive side is if you have a very narrow campaign and a very narrowly selected target audience, then you can make those really personalized connections with people and you can get really good returns and then you can even develop very meaningful
and long-term relationships with your target audience and they can essentially become apostles for your brand and they go out and tell their friends, and even tell strangers that your company is this amazing company they should do business with and that's really the ultimate dream and goal of every marketer, every business, is to have other people marketing your product for you at no cost to you.V
Jake Braun:
Yeah, that's definitely where you wanna be. That's where you strategically encourage word of mouth marketing and get more referrals to your business. And just to touch on one thing that you mentioned earlier is you have to ignore those people who aren't in the target audience who are being critical of your campaign because they're not who you're going after. Sometimes you have to actively dissuade them because they're not in your target audience. Don't worry about them. Focus who's on the target audience of the campaign.
Mirela Setkic:
Exactly, and knowing who is not in your target audience is just as important as knowing who is. If you don't know who is really not supposed to be receiving your message, and that person gets the message and they give you terrible feedback, then you might think like oh my gosh, like my customers don't like me and I'm not doing this right, but if you knew that that person is just someone who is not the target of your message, then it's okay, they don't like it, and honestly they're probably not even supposed to like it because you're not speaking to anything that pertains to them.
Jake Braun:
You're not gonna get them anyways. They weren't in the audience, so just don't even worry about it.
Mirela Setkic:
Yeah, exactly, if I go back to my red shoe, or pink shoe, or whatever, the shoe with pockets example, if somehow, if I didn't do as good of a job and my campaign wasn't as targeted and I ended up somehow marketing my shoes to men who are in their 60s and they don't care for shoes, and I hear a whole bunch of negative feedback from these men, if I know that they're not my target audience, I'm fine with it. If I don't know, then I might think oh my God, my shoe is a terrible idea, my customers really don't want this and that can totally take my business and my campaign in a totally different direction.
Jake Braun:
Mm-hmm, so maybe we should now go into the going as niche as possible, and how that is a big benefit.
Mirela Setkic:
Yes, I think when people start out, you know, you start your business, and you think I want to get as many people to buy my product, and I just wanna like flood the market. Everyone needs to be wearing my shoe with pockets. Like I need to go hard and a lot of times people talk about when they're projecting their revenue they're like this percentage of the market will use my stuff and then people really try to go hard and big, and that is really not the best way to do it. You want to divide your target market into little segments and make those as niche as possible because you will be able to have the most authentic conversations and deliver the most tailored product to your niche audiences, so the more niche that you go, the better and more effective and relevant you're going to appear.
Jake Braun:
And when you do go big, a lot of the times it involves making many niche target audiences even if you are going after a large target market, you might have many, many niche target audiences that you need to run marketing campaigns in order to address that entire target market.
Mirela Setkic:
Yes, exactly. If you are a coffee shop, then your target market are people who enjoy coffee. Well, if you sell both cold and hot coffee, those two groups of coffee lovers are slightly different. I personally like hot coffee. I am not a big cold coffee person, so that coffee shop has to market their different types of coffee very differently and if they run a campaign that's just selling their coffee and one of the ads for example is cold coffee, and I see that ad, it's not gonna resonate with me. But if they really narrow it down, and they're like okay, this campaign is only going to be for people who like lattes and I love lattes, so if they run that campaign and I see it, that's gonna speak to my heart and I'm more likely to go and buy that coffee than if they just show me a cold coffee with ice cubes in it. That makes me feel cold, and I don't want to get it.
Jake Braun:
Yeah, and I think that's a great point and that coffee shop needs to not worry about alienating you when you see the cold coffee ad because when you do see that latte ad, then you're gonna be like, well I'm going there. Like you're not gonna be dissuaded by the fact that you saw that cold coffee commercial. That one didn't appeal to you, but this new commercial that did appeal to you, that's gonna get you to go to the store.
Mirela Setkic:
Yes, and that makes me think like oh my gosh, they understand me. They, too, appreciate a good latte.
Jake Braun:
They know latte lovers.
Mirela Setkic:
Yeah, they know lattes, and lattes are a way to my heart on some days, like at 3:00 and so, and like what if they ran an ad at three PM on a Wednesday with like this amazing latte and I see it on Instagram? I'm like nine out of 10 times probably going to jump out of my chair and go get that latte.
Jake Braun:
Yeah, so maybe we should go into the takeaways now?
Mirela Setkic:
Yeah, I guess let's tell people how would they define a target market and where do they start.
Jake Braun:
Okay, so let's think about it in the easiest way possible, and it is easy. You just want to think about who will use your product. It's that simple. Who are the people who use this product? Who are the un-served or underserved people? And that's your target market. It's those people, that's it.
Mirela Setkic:
That is the big pile, big group of people. And then if you want to take it down a little bit more and you want to define or select your target audiences, then you take your target market and find different groups within that target market and think about how are these groups different and what does each one of them have in common? What do people within each group have in common? And then those are your target audiences. So for example, Valentine's Day. You're a chocolate shop on Central Avenue and you want to run a Valentine's Day campaign for chocolate. So you might have several different audiences for that campaign. One of the audiences could be people who are in a relationship and they want to buy a gift for Valentine's Day for their significant other. Another group could be friends who maybe are single and they're buying Valentine's Day gifts for each other. And then you have people who like to treat themselves on Valentine's Day and buy some
thing nice, so that's another audience. And then let's say that it's not even Valentine's Day. It's just like your regular throughout the year campaign. So you might have a campaign for people who like dark chocolate. Then you might have a campaign for people who can only eat sugar-free chocolate. Maybe they're diabetic or they don't like sugar for some other reason. So that is another small target audience of people. So you would not be advertising super sweet chocolate to people who can't eat sugar.
Jake Braun:
Yeah, I think that's a great example. It perfectly illustrates how you can have very different target audiences, all of them with very different campaigns, and all of them that fall within your target market.
Mirela Setkic:
Exactly, and the narrower the audience is, the more focused it is, and it's probably going to yield better responses to the campaigns that you're targeting to that group of people.
Jake Braun:
Yep, so I think, start early. You should develop your target market before you even develop your product and service if at all possible, and then get as many target audiences as you need and go as niche as possible.
Mirela Setkic:
Yes, and develop really personalized campaigns for all of the audiences that you have selected so everyone feels special and the ultimate goal is for people within each audience or target audiences is to feel like you're talking to themselves like, to them, it's like oh my God, how do they know that I love lattes with skim milk and whatever the case is.
Jake Braun:
Yeah, well I think we got to everything. Is there anything you can think of that we need to mention before we wrap it up?
Mirela Setkic:
I don't think so, but maybe we forgot something so if people can think of something, leave us a comment if they're watching this, or if they're not, if they're just listening that they can contact us and let us know and we can even maybe do another segment and target the markets and audiences if we missed a lot of information.
Jake Braun:
Yeah, it’s been a great 21st episode. And definitely feel free to reach out to us if you have any questions or comments about anything we talked about today or marketing in general. KickinItWithKapok.com, or on social media. We're on Facebook, Instagram and Twitter as Kapok Marketing. This has been Kickin’ it with Kapok brought to you by Kapok Marketing. Thanks for listening. We’ll have something just as great for you next time.